Montes Day 1: Causes of The Great Depression

THE GREAT DEPRESSION

1

1877

1900

The Gilded Age: ___ to ___

The Progressive Era: ____ to ____

American Imperialism: ___to _____

World War I: _____ to ______

Roaring 20s: ____to ______

The Great Depression: ____ to ____

1900

1920

1898

1920

1914

1918

(1917)

1920

1929

1929

1941

Multiple Choice

What period did we just finish studying that covered from 1920-1929?

• World War I

• Great Depression

• Roaring 20s

• American Imperialism

Multiple Choice

Ch.11 is about the worst depression to ever hit the United States. What is the time frame of the Great Depression?

• 1914-1918

• 1929-1941

• 1900-1920

• 1920-1929

CAUSES OF THE GREAT DEPRESSION

1.Speculation

2.Overproduction

3.Unsound/Shaky Banking Practice

4.Restricted Intl Trade (High Tariffs)

2

CAUSES OF THE GREAT DEPRESSION

Speculation led to the 1929 stock crash

1.

People invested in rising stock prices (hoping to get rich) instead of well
established stocks (looking for big/quick $)

2.

Stock prices went up even though they were not worth it, because people kept investing.

3.

Buying on Margin: People bought on margin(financed w/only 10% down)
instead of purchasing cash Were still responsible for repayment if stock
collapsed.

4. In October1929, stock prices fell in a crash known as Black Tuesday.

3

CAUSES OF THE GREAT DEPRESSION

Overproduction
Rapid economic expansion = More products
were manufactured than people could buy.
(people lacked money - relied on payment plans)

4

CAUSES OF THE GREAT DEPRESSION

Unsound/Shaky Banking Practices
Banks generally collected money from depositors and
then invested these funds (earned interest on deposits)
- some banks invested depositors' money poorly.
- Overextension of credit
5

CAUSES OF THE GREAT DEPRESSION

.

Restricted International Trade

Americans put up high protective tariffs (1930 Smoot-Hawley Tariff Act had raised tariffs
to their highest levels in history), restricting international trade to keep business here.

-Tariff - tax on imported goods; protects domestic businesses from competition

-Other countries retaliated with their own tariffs

-Even LESS money came in.

6

Open Ended

What are the four causes of the Great Depression?

Multiple Choice

Which of the following was a major cause of the Great Depression?

• overproduction and underconsumption

• an increase in demand for imported products

• a decrease in the supply of consumer goods

• an increase in the price of wheat on the world market

Multiple Choice

Which of the following was NOT a cause of the Great Depression?

• overspeculation on stocks using borrowed money

• unpaid debts from fighting World War I

• High tariffs discouraged international trade

• Too much debt from buying goods on installment plans

Stock Market Crash

“Black Tuesday”
October 29, 1929

Stock prices fell to all time lows.

(Shares were sold for less and less)

2

Does lack of money and ability to feed oneself + family warrant the term “Depression”?

What would you call it when life isn’t working out? ie: businesses failed - farmers lost their

farms, banks failed & millions of people were out of work.

Multiple Choice

When did the stock market crash?

• 1919

• 1985

• 1929

• 1829